Maruti Suzuki hits fresh record high on brokerage upgrades

NEW DELHI: Maruti Suzuki India Ltd surged over 2 per cent in early trade on Monday after most brokerages upgraded the stock and raised its target prices by 10-30 per cent.

After gaining over 4 per cent on Friday, the country's largest car maker rose over 2 per cent to its fresh record high of Rs 1634. At 10:00 am, Maruti was trading 1.8 per cent higher at Rs 1629.30. The stock surged to its 52-week high of Rs 1634 in intraday trade today.

UBS upgraded its ratings on Maruti Suzuki India Ltd to "buy" from "neutral," and raised its price target to Rs 2,000 from Rs 1,500, translating into a gain of over 30 per cent from its previous target price.

According to UBS, the weakening Japanese yen over the past three months would boost earnings. Maruti Suzuki is also well positioned to benefit from improvements in petrol car sales, said the brokerage firm.

Five out of ten brokerage firms have maintained their 'buy' rating on the stock but raised their target prices for the counter by 5-20 per cent.

CLSA has maintained 'buy' rating on the stock with a target price of Rs 2020, while BofA-ML raised its target price from Rs 1650 earlier to Rs 1808 post Q3 results.

Two out of ten brokerage firms have maintained their 'overweight' rating on the counter. Morgan Stanley and HSBC maintained 'overweight' rating on the counter with a target price of Rs 1835 and Rs 1820 respectively.

JPMorgan and Credit Suisse maintained 'neutral' rating on the counter but have raised their target prices. JPMorgan raised its target price from Rs 1450 earlier to Rs 1650 and Credit Suisse raised its target price from Rs 1632 earlier to Rs 1694.

While Citigroup downgraded the stock to 'neutral' from 'buy' citing current upsurge of nearly 35 per cent in the stock price. "Although macro's are looking better, micro is deteriorating," said Citi report.

The brokerage firm has marginally lowered its price target from Rs 1681 to Rs 1677 and has also cut earnings estimates by 5 per cent for FY14 and 1 per cent for FY15.